ICMSA seeks clarification on EU milk scheme rules

Dairy

8 Sept 2016

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The Minister for Agriculture, Michael Creed, must offer clarification on whether participation in the EU Voluntary Milk Supply Reduction Scheme is a condition for farmers to be eligible for the €11m crisis fund agreed under the July Dairy Package, according to ICMSA president John Comer.

He noted that under the rules of the package, to be eligible for the €11m fund, a member state must ensure farmers meet one or more of the following:

n Participate in Voluntary Reduction Scheme or do not increase production

n Farm at a small scale

n Engage in extensive production methods

n Apply environmental and climate friendly production methods

n Implement co-operation projects

n Implement quality schemes

n Train in financial instruments and risk management tools

Mr Comer said while we were unaware what the Minister’s intentions were in relation to the €11m fund, it was clear that the Minister – in drawing down the €11m - will have to include one of these criteria in whatever package he puts forward. That puts a time factor in place. He said: “In advance of the closing date for the Voluntary Milk Supply Reduction Scheme on September 15 Minister Creed must inform farmers whether or not participation in that scheme will be the qualifying criteria for application to the €11m Dairy Crisis fund. We can’t have a situation whereby a farmer decides not to partake in the Voluntary Scheme only to find out later that that was a eligibility condition for application to the Dairy Crisis Fund. We need a definitive answer from the Minister so that farmers can make their decision based on all the facts.”

He noted that the Voluntary Supply Reduction Scheme - which ICMSA was alone in advocating and which was strongly opposed by other farm organisations and all milk processors - had already delivered for farmers in terms of increased milk prices and it was not coincidence that the sentiments being expressed by milk processors had become notably more positive following its introduction as processors now realise that farmers had a viable alternative to supplying milk this autumn unless the milk price processors began paying a viable price.

“If fully utilised in the EU, the Voluntary Reduction Scheme will take out approximately 3 per cent of EU milk production in Q4 and this will have a further positive impact on milk prices. Oversupply led to the collapse in milk prices and the abject failure of the Irish dairy sector and others to recognise that fact earlier has led to farmers milking cows below the cost of production for more than a year,” he said.

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